Festive shoppers lift John Lewis sales 1.2%

Published on Friday 2 January 2009 21:47

BARGAIN-HUNGRY shoppers drove sales at John Lewis up 1.2 per cent to more than £71 million in the days leading up to and after Christmas, the department store group revealed yesterday.

However, the industry remained sceptical yesterday that the performance foreshadowed any sort of general high street recovery.

A more complete picture of the effect on the economic slowdown will emerge when a host of leading names report their festive figures over the next fortnight. Marks & Spencer, Debenhams, Next and Sainsbury's are among those due to publish their results.

However, the figures from John Lewis did give some hope, with a robust performance at its Waitrose supermarket chain, where sales in the week to 27 December rocketed 40.6 per cent to 111.3m, boosting the firm's fortunes.

The performance was the first year-on-year weekly increase at the department store since last September.

Like its peers, John Lewis has suffered as shoppers cut back on spending amid soaring unemployment and fears of a lengthy recession.

But Patrick Lewis, the group's department stores retail director, said: "The pundits who predicted it would come fast and furious in the final week were on the money."

The chain had previously announced that the first day of its clearance sale – 27 December – had produced record takings.

"The pace kept up at the same healthy rate for the first two days of this week," Lewis said yesterday.

The healthy figures, particularly at Waitrose, suggest consumers were determined not to let worries about what the new year might bring impinge on their festive enjoyment.

A 25 per cent rise in fashion sales offset a 20.5 per cent fall in sales of more expensive, home-related goods. Sales of electricals and home technology products were down 1.2 per cent.

Waitrose had previously reported a big rise in pre-Christmas sales, including its busiest ever trading day on 23 December.

However, many in the industry doubt that the John Lewis Christmas surge will be either widespread or prolonged as the recession deepens over the next few months.

Howard Archer, IHS Global Insight economist, said he still suspected that retailers "will face a desperately difficult 2009".

Archer added: "This will keep pressure on them to price competitively this year, which will obviously impact on (profit] margins.

"As a result, many more retailers seem likely to go under in 2009."

Many City analysts believe the Christmas trading has largely been a promotion-led "one-off" for the embattled sector, with little underlying relevance.

One analyst said: "John Lewis is a welcome boost, but it could be very short-term with little read-across for the wider sector. It is still very cold on the high street."

Woolworths, the general merchandise company, and furniture group MFI both went into administrative receivership in the run-up to Christmas, and several smaller companies have followed suit in recent days.

Adams, Britain's biggest independent childrenswear retailer, went into administration last Wednesday, threatening about 3,200 jobs.

Mid-market fashion retailer Next and department stores chain Debenhams report on their Christmas trading on Tuesday, Maks & Spencer on Wednesday, and supermarket group Sainsbury's on Thursday.

Analysts believe the next two weeks will show the extent of what was billed by the British Retail Consortium as the toughest festive season on the high street for years.

Marks & Spencer, a retail totem of Middle Britain, waged an aggressive pre- and post-Christmas sales campaign, with 20 per cent discount days in the run-up to Christmas and reductions of up to 50 per cent on Boxing Day.

Scottish stores outperform rest of UK

SCOTLAND easily outperformed the rest of the UK for John Lewis.

Sales in its Glasgow store were up 9.7 per cent, Edinburgh 5.3 per cent, and Aberdeen 8.3 per cent.

Laura McBride, operations manager of John Lewis Glasgow, said the success of the chain's clearance sales reflected the fact that "Scots are well known for liking a bargain".

She added: "It appears that Scottish shoppers are very conscious of current economic conditions and have been taking advantage of deals available to make their budgets stretch."

Over the longer 22-week period, the Edinburgh and Glasgow stores did worse than the UK average, where total sales were down 4.5 per cent. Edinburgh was down 7.6 per cent and Glasgow down 8.5 per cent. Aberdeen sales fell 2.3 per cent over the longer period.

Fiona Moriarty, of the Scottish Retail Consortium, said the chain's latest Scottish results were "very encouraging".